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New Jersey Opens Door to Treble Damages in Products Claims (NJ)

January 22, 2021

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<p style="text-align: justify;">New Jersey’s Supreme Court troublingly opened the door to avaricious plaintiffs, potentially allowing plaintiffs to simultaneously allege product liability actions and actions under the Consumer Fraud Act. The Consumer Fraud Act allows for the potential of treble damages, attorneys fees, and costs to successful plaintiffs. Until recently, the Product Liability Act, which governs the strict product liability regime in New Jersey, subsumed almost every cause of action into a products claim, if the thrust of the claim was that of a defective product or warning.</p>
<p style="text-align: justify;">In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2021/01/Sun-Chemical-Corp.-v.-Fike-Corp..pdf">Sun Chemical Corp. v. Fike Corp.</a></em>, 243 N.J. 319 (2020), a fire occurred that resulted in property damage and bodily injury. Relevant here, Sun had purchased a fire suppression system, and alleged that the fire suppression system manufacturer materially misrepresented that the “(1) the Suppression System would prevent explosions; (2) the Suppression System would have an audible alarm; (3) the Suppression System complied with industry standards; and (4) the System had never failed.” The Consumer Fraud Act broadly prohibits deceptive or misleading conduct or practices, including in the sale of goods. Typically, the CFA prohibits material misrepresentations or omissions. However, as relevant here, the CFA typically “punishes” express or affirmative misrepresentations more so than omissions or unintended deceptive conduct. Sun alleged affirmative and express material misrepresentations under the CFA.</p>
<p style="text-align: justify;">The New Jersey Supreme Court declared that the more serious “sins” of material affirmative and express material misrepresentations under the CFA were not subsumed under the PLA. Therefore, plaintiffs can now allege simultaneous product liability cases and violations of the CFA.</p>
<p style="text-align: justify;">Accordingly, we expect plaintiffs to allege CFA claims pursuant to written or verbal warranties, warnings, and representations, in order to obtain leverage with respect to the treble damages and attorneys fees under the CFA going forward.</p>
<p style="text-align: justify;">Thanks to Matt Care for his contribution to this post. If you have any questions or comments, please contact <a href="mailto:chayes@wcmlaw.com">Colleen Hayes</a>.</p>

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